Fastfood giant Jollibee Foods Corp. (JFC) has obtained a $100-million loan from several local and foreign financial institutions to fund its investments in China, particularly the expansion of the Yonghe King brand.
In its disclosure to the Philippine Stock Exchange, JFC said the loan facility, denominated in renminbi, shall be paid in three years at a fixed interest rate. It was arranged by UBS AG, Hong Kong branch.
Among the financial institutions that lent money to JFC include Metropolitan Bank & Trust Co., Banco De Oro Unibank, Rizal Commercial Banking Corp. and The Bank of Tokyo-Mitsubishi UFJ Ltd.
“We would like to thank our lenders, facility agent, swap bank and the arranger UBS AG, Hongkong for giving us their turst and for supporting our venture in China. The fund they are lending us will enable JFC to pursue its profitable expansion in line of the largest and fastest growing consumer markets in the world,” JFC chairman and chief executive officer Tony Tan Caktiong said.
Tan Caktiong said a portion of the money will also be used to expand the store network of other acquired brands in China, the development of a commissary and product development facilities of the Jollibee Group and acquisition of Hongzhuangyuan restaurant chain based in Beijing.
JFC is acquiring Hongzhuangyuan, which operates a total of 37 restaurants in China, for P2.5 billion or $50.5 million.
JFC also owns Chinese tea-house chain Chun Shui Tang.
Jaime Baysa, chief finance officer of JFC, said the loan facility provides the lowest cost of financing for the group’s business expansion in China and allows the company to use its existing cash for the continued expansion of its business in the Philippines and other countries aside from China.
Baysa said the group has practically no debt and has not borrowed since 2001.
The Jollibee Group operates the largest restaurant network in the Philippines with total operating stores of 1,691 worldwide as of July 31, 2008. It has 1,472 stores in the Philippines and 219 stores overseas.
In China, the group has a total of 123 stores as of the same period. Since December last year, the group has increased the number of its stores in China by 23 percent.